Black refers to ink color. Most retailers don't show a profit for the year until this day after Thanksgiving. It is also a time for great bargains.
Read About the good bargains being offered here.
Sunday, September 24, 2006
Tuesday, July 18, 2006
ECRI's Lakshman Achuthan on NBR
Lakshman spoke with the Nightly Business Report's Susie Gharib about the impact from oil price spikes and other shocks on the economy, and monetary policy going forward.
Read the Full Transcript of the Interview.
One On One With Lakshman Achuthan of the Economic Cycle Research Institute.
SUSIE GHARIB: Oil prices dropped today, closing at the $75 level. But our guest tonight says high oil prices are still quote dangerous for the U.S. economy. Joining us now to explain, Lakshman Achuthin, economist with the Economic Cycle Research Institute. Hi Lakshman..
LAKSHMAN ACHUTHAN, MANAGING DIRECTOR, ECONOMIC CYCLE RESEARCH INSTITUTE: Hi, Susie..
GHARIB: Tell us what you mean that high oil prices are a risk for the economy..
ACHUTHAN: Well, it really has to do with where we are in the economic cycle. We are in the fifth year of expansion, but the economy is down shifting. Specifically the growth rate of the economy is actually beginning to recede a bit, still positive, but receding. And this means that essentially you don`t have the momentum that you had, for example, last year, when oil prices first started to spike. And without that momentum, the economy is more vulnerable to negative shocks like high oil prices.
GHARIB: So are you saying that a year ago $80 oil, for example, would have been less of a risk than right now having it, hitting that price level?
ACHUTHAN: Absolutely. It`s really -- you could think of it like a window of vulnerability has opened up in 2006 that we didn`t have open in 2005 and I`m afraid that some people may have learned from 2005 that this economy can just take anything that`s thrown at it. And I believe it can take a lot being thrown at it as long as it`s in this cyclical upswing. Now we have a bit of a softening ahead of us, a cyclical downturn in growth. So the same type of shock that we had last year can do a lot more damage this year.
GHARIB: Some people say that, you know, oil is not trading based on fundamentals, that it`s trading on other issues, whether it`s about fear of terrorism, fear of hurricanes. When do you think that oil prices will accurately reflect supply/demand issues?
ACHUTHAN: Well, I mean, to some degree, they may be reflecting them right now where there`s all this concern about potential disruptions to supply. And that`s, I think, what we mean by this risk premium that`s in there because of all the geopolitical concerns and hurricane or weather concerns and what not. I do think looking at leading indicators, looking ahead not an the economy now but looking forward, around the world, particularly at the industrial sector globally, that there is going to be slower growth ahead and if can see this geopolitical issue in the Middle East begin to draw to a close -- and there was some suggestions that we`re seeing some light at the end of the tunnel -- then I think you get the focus back on where is demand headed and that looks like it`s heading a little softer at this point.
GHARIB: As you know Lakshman, Ben Bernanke is going to be testifying in front of Congress this week, Wednesday and Thursday. Do you think that these geopolitical concerns that you`re talking about accompanied with high prices of oil are going to be a factor in the Fed holding off from raising interest rates when they meet in August?
ACHUTHAN: Well, I certainly this is in the -- you know, on the side of the equation suggesting or arguing that you would want to hold off. This is being balanced and we`ll hear about this during his testimony in Washington, about... It`s being balanced against this vigilance against inflation. You have high oil prices. You`re going to see the PPI, the producer price index and the consumer price index probably come in a little higher in the latest reading. Even though they`re coincident, that will impact peoples` fears about where things are headed in the future. So you`ll have to probably hear from the Fed something along the lines of we`re very vigilant against inflation, but we reserve the right to move quickly if we need to if we so this economy slowing down too much.
GHARIB: History shows that when the Federal Reserve raises interest rates at a time when oil prices are spiking that it leads to a recession. This has happened many times in the past. Do you think that Ben Bernanke could end up making the same mistake as many of his predecessors?
ACHUTHAN: It`s possible. I mean, to be fair, last year we had oil prices rising and rising interest rates and we didn`t get a recession. This time around, I think that is a risk, but I think Mr. Bernanke is a good student of history and for example, he`s very well aware of what happened in the mid-`90s where we had a slowdown in `95 and then-Chairman Alan Greenspan essentially said, even if CPI comes in stronger, I`m willing to go the other way in order to keep this expansion going. In retrospect, we know that that was the foundation for the boom of the late `90s. So one can hope, at least.
GHARIB: All right, thank you so much, Lakshman, we appreciate your thoughts as always.
ACHUTHAN: Thanks for having me.
GHARIB: We`ve been speaking with Lakshman Achuthan of the Economic Cycle Research Institute.
Read the Full Transcript of the Interview.
One On One With Lakshman Achuthan of the Economic Cycle Research Institute.
SUSIE GHARIB: Oil prices dropped today, closing at the $75 level. But our guest tonight says high oil prices are still quote dangerous for the U.S. economy. Joining us now to explain, Lakshman Achuthin, economist with the Economic Cycle Research Institute. Hi Lakshman..
LAKSHMAN ACHUTHAN, MANAGING DIRECTOR, ECONOMIC CYCLE RESEARCH INSTITUTE: Hi, Susie..
GHARIB: Tell us what you mean that high oil prices are a risk for the economy..
ACHUTHAN: Well, it really has to do with where we are in the economic cycle. We are in the fifth year of expansion, but the economy is down shifting. Specifically the growth rate of the economy is actually beginning to recede a bit, still positive, but receding. And this means that essentially you don`t have the momentum that you had, for example, last year, when oil prices first started to spike. And without that momentum, the economy is more vulnerable to negative shocks like high oil prices.
GHARIB: So are you saying that a year ago $80 oil, for example, would have been less of a risk than right now having it, hitting that price level?
ACHUTHAN: Absolutely. It`s really -- you could think of it like a window of vulnerability has opened up in 2006 that we didn`t have open in 2005 and I`m afraid that some people may have learned from 2005 that this economy can just take anything that`s thrown at it. And I believe it can take a lot being thrown at it as long as it`s in this cyclical upswing. Now we have a bit of a softening ahead of us, a cyclical downturn in growth. So the same type of shock that we had last year can do a lot more damage this year.
GHARIB: Some people say that, you know, oil is not trading based on fundamentals, that it`s trading on other issues, whether it`s about fear of terrorism, fear of hurricanes. When do you think that oil prices will accurately reflect supply/demand issues?
ACHUTHAN: Well, I mean, to some degree, they may be reflecting them right now where there`s all this concern about potential disruptions to supply. And that`s, I think, what we mean by this risk premium that`s in there because of all the geopolitical concerns and hurricane or weather concerns and what not. I do think looking at leading indicators, looking ahead not an the economy now but looking forward, around the world, particularly at the industrial sector globally, that there is going to be slower growth ahead and if can see this geopolitical issue in the Middle East begin to draw to a close -- and there was some suggestions that we`re seeing some light at the end of the tunnel -- then I think you get the focus back on where is demand headed and that looks like it`s heading a little softer at this point.
GHARIB: As you know Lakshman, Ben Bernanke is going to be testifying in front of Congress this week, Wednesday and Thursday. Do you think that these geopolitical concerns that you`re talking about accompanied with high prices of oil are going to be a factor in the Fed holding off from raising interest rates when they meet in August?
ACHUTHAN: Well, I certainly this is in the -- you know, on the side of the equation suggesting or arguing that you would want to hold off. This is being balanced and we`ll hear about this during his testimony in Washington, about... It`s being balanced against this vigilance against inflation. You have high oil prices. You`re going to see the PPI, the producer price index and the consumer price index probably come in a little higher in the latest reading. Even though they`re coincident, that will impact peoples` fears about where things are headed in the future. So you`ll have to probably hear from the Fed something along the lines of we`re very vigilant against inflation, but we reserve the right to move quickly if we need to if we so this economy slowing down too much.
GHARIB: History shows that when the Federal Reserve raises interest rates at a time when oil prices are spiking that it leads to a recession. This has happened many times in the past. Do you think that Ben Bernanke could end up making the same mistake as many of his predecessors?
ACHUTHAN: It`s possible. I mean, to be fair, last year we had oil prices rising and rising interest rates and we didn`t get a recession. This time around, I think that is a risk, but I think Mr. Bernanke is a good student of history and for example, he`s very well aware of what happened in the mid-`90s where we had a slowdown in `95 and then-Chairman Alan Greenspan essentially said, even if CPI comes in stronger, I`m willing to go the other way in order to keep this expansion going. In retrospect, we know that that was the foundation for the boom of the late `90s. So one can hope, at least.
GHARIB: All right, thank you so much, Lakshman, we appreciate your thoughts as always.
ACHUTHAN: Thanks for having me.
GHARIB: We`ve been speaking with Lakshman Achuthan of the Economic Cycle Research Institute.
Friday, July 14, 2006
David Korn on Bob Brinker for July 2006
Noted Bob Brinker historian David Korn shares his archives of past interpretations of important Moneytalk shows. Read about it here.
Thursday, July 13, 2006
Dollar Cost Average or Lump Sum?
Lump sum investments into the market usually offer the best returns but dollar cost averaging can help you avoid the pain of unexpected declines. Which is best for you? Read my article here.
Bob Brinker Update for July 2006
Steve Thompson gives his update of Bob Brinker's Market timing model indicators. At the end of the article, Steve predicts if Brinker will remain bullish or turn bearish. Read Steve's article here.
Friday, February 24, 2006
Year Three of Kirk Lindstrom's Investment Newsletter
Year three
Author: lcha
Date: Feb 24, 2006
I renewed my subscription to Kirk's newsletter for a third year now. My reasons are many but first and foremost, I am making more money from the timeliness of Kirk's tech stock picks than the cost of the newsletter. Kirk understands the tech scene much better than an oil guy like me so for the tech portion of my portfolio I am deferring to Kirk's judgment, saving myself lots of research time and making a profit. That's the bottom line.
Also, I applaud the transparency of Kirk's newsletter. Nothing hidden. Nothing washed over. All newsletters should be so open and forthcoming.
And another big reason I re-subscribed to Kirk's newsletter is as a show of support for his investment website at Suite101. There is so much good information I glean from the website from so many knowledgeable posters on so many topics that that alone is worth the price of admission. It takes a lot of time to set up and moderate a site like this and I want to see it continue. The discussions here are among the most civil I encounter anywhere on the web. Civil discussions on the web are not to be taken for granted as most of you know.
Thanks for the efforts Kirk!
Thanks VERY much!!!
Originally posted here.
I moved my discussion forums to "Investing for the Long Term" at Facebook. Request Invitation to FREE facebook discussion group "Investing for the Long Term." Membership is FREE and you do not need to subscribe to my newsletter to read or post.
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